New York – Barclays Capital today announced that it served as the executing and clearing broker on an interest rate swap (“IRS”) transaction for Citadel, which became the first end user to electronically execute and clear an interest rate swap through CME Clearing, using Bloomberg’s Fixed Income Trading (“FIT”) platform. The transaction used full electronic connectivity across a number of industry participants:
-Interest rate swap transaction executed between Citadel and Barclays Capital using the dealer’s BARX electronic trading platform, on the Bloomberg Professional® service -Interest rate swap details transmitted to CME Clearing and to Barclays Capital as clearing broker using Bloomberg’s FIT middleware service -Barclays Capital clears the trade on behalf of Citadel through CME Clearing
The transaction represents a first for both Barclays Capital and for Bloomberg FIT, being the first time that Barclays Capital has cleared an interest rate swap electronically at CME Group, and the first time that Bloomberg’s execution service has executed a fully-electronic CME Group-cleared interest rate swap.
Citadel also executed an IRS transaction and cleared the trade at LCH.Clearnet Ltd’s clearing service, SwapClear, again using the full electronic connectivity of Barclays Capital and Bloomberg.
“Being able to execute and clear OTC transactions electronically using reliable and seamless platforms will be key to promoting the fast adoption of OTC derivatives clearing,” said Ray Kahn, head of OTC derivatives clearing for Barclays Capital. “By partnering with Citadel in the early stages, we have been able to work with them on preparing for and implementing the requirements of central clearing in a controlled environment.”
“We are pleased to have been part of an important milestone in the reform of OTC derivatives,” said Gerald Beeson, Chief Operating Officer of Citadel LLC. “Electronic execution and real-time clearing of swaps for all participants fulfills a core objective of the Dodd-Frank bill by ensuring that our markets are open, transparent and competitive.”
Citadel and one other large US asset manager have also recently electronically executed and cleared credit default swaps (“CDS”) trades through Barclays Capital, again using Bloomberg’s FIT platform and CME Clearing. These transactions were made possible by Barclays Capital’s recent introduction of electronic trading of CDS on Bloomberg for all major U.S. and European credit indices and more than 70 single-name CDS across several sectors. Barclays Capital has a history of innovation in OTC products, having also been the first broker-dealer to offer electronic trading of interest rate swaps on Bloomberg across major and minor currencies.
Harry Harrison, head of Rates Trading for Barclays Capital said, “These transactions demonstrate Barclays Capital’s ability to offer scalable solutions for the clearing and execution of OTC derivatives transactions, in compliance with the requirements of Dodd-Frank.”
“These trades are significant for Bloomberg Fixed Income Trading, as they are the latest in a series of trades that meet the spirit of the upcoming swaps execution facilities guidelines,” said Ben Macdonald, global head of Bloomberg’s Fixed Income business. “Bloomberg FIT is well positioned to meet our clients’ needs to trade a diverse set of products that can be cleared at all major clearinghouses for CDS and IRS.”
Barclays Capital’s OTC Derivatives Clearing business is a multi- asset class offering and part of the firm’s Prime Services business. In December 2009, Barclays Capital was the first broker to clear client credit default swaps (CDS) and interest rate derivatives. The firm was recently recognized by Risk magazine as its Interest Rate Derivatives House of the Year and by IFR magazine as its Credit Derivatives House of the Year, and received 130 Best-in-Class awards out of a possible 144 in Global Custodian magazine’s 2011 OTC Derivatives Prime Brokerage Survey. Through BARX, Barclays Capital’s electronic trading platform, clients can benefit from straight-through processing, clearing and reporting of OTC transactions.
About Barclays Capital Barclays Capital is the investment banking division of Barclays Bank PLC. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with a full spectrum of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs 25,000 people and has the global reach, advisory services and distribution power to meet the needs of issuers and investors worldwide. For further information about Barclays Capital, please visit our website www.barclayscapital.com
Mark Lane, +1 212-412-1413, firstname.lastname@example.org
#<761373.6922700.2.1.87.23378.2660># -0- Apr/15/2011 18:09 GMT